Daily Crypto News, January, 18th💰
Welcome to the Daily Crypto News: A complete News Review, Coin Calendar and Analysis. Enjoy!
🗞 Bitcoin Struggles to Recover After Biggest Weekly Price Loss Since September
Bitcoin is up only slightly on Monday after seeing its biggest weekly decline in over four months.
At press time, the cryptocurrency is trading 0.2% higher on the day near $35,838, according to CoinDesk 20 data. Prices fell by 6% in the seven days leading up to Jan. 17, a weekly fall not seen since the first week of September.
Bitcoin took a beating a week ago, falling from $40,000 to $30,305 in a matter of few hours, mainly due to heavy selling in the spot market. The cryptocurrency spent the rest of the week trimming losses and tested $40,000 at one point before ending the week (Sunday, UTC) just under $36,000.
However, it may be too early to call an end of the bull market correction, as the cryptocurrency is still trapped in a narrowing price range or triangle pattern on the hourly chart, according to Parick Heusser, head of trading at Swiss-based Crypto Finance AG.
“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout [above $40,000] to occur,” the strategists wrote.
Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, reopened last Tuesday after a month-long break. Since then, the trust has accumulated at least 4,700 BTC (-0.57%), according to the Twitter-based GBTC Bitcoin Tracker. If accurate, that’s $171 million-worth of purchases in six days – significantly less than JPMorgan’s required daily average of $100 million.
🗞 Crypto Long & Short: No, Bitcoin Is Not in a Bubble
To think that such a festive concept, one that evokes both sophistication and childlike wonder, could become so financially charged …
Words matter
To see why, let’s pull out our financial dictionaries:
Investopedia: “During a bubble, assets typically trade at a price, or within a price range, that greatly exceeds the asset’s intrinsic value (the price does not align with the fundamentals of the asset).”
Nasdaq: “A market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset.”
Wikipedia: “A situation in which asset prices appear to be based on implausible or inconsistent views about the future. It could also be described as [an asset that trades] at a price or price range that strongly exceeds the asset’s intrinsic value.”
Social concepts
Maybe these analysts and commentators are using the term “bubble” in the social sense?
Economist Robert Schiller defines a speculative bubble as a “social epidemic whose contagion is mediated by price movements.” Those of us that spend time on Twitter or YouTube may be nodding in recognition. But Schiller specifies “epidemic” (an unfortunate metaphor in 2020-21), which implies mainstream participation. The cacophony of bitcoin maximalists and altcoin enthusiasts is far from mainstream.
The anti-bubble
It could also be argued that bitcoin is the anti-bubble, that its price is going up because of bubbles elsewhere in the economy. Many investors are buying bitcoin in response to what they see as a massive sovereign bond bubble, which they believe the government will try to deflate by printing money.
And as for equities, the blistering market valuations of tech companies are to a large degree dependent on low interest rates which could head up fast should the bond bubble burst. This would make “alternatives” such as bitcoin even more attractive.
To get a feel for bitcoin’s anti-bubble nature, try to imagine what its “fundamental value” would be if we had central banks that did not print money, governments that kept balanced accounts and no fear at all of MMT, financial repression or any kind of populist uprisings. In this scenario, demand and price would be much lower than they are today.
Macro currents
🗞 Joe Biden Confirms Gary Gensler as US SEC Chair
Gary Gensler, former partner at Goldman Sachs, became part of Biden’s transition team in November.
Reports that Gary Gensler is set to take over the SEC emerged last week.
Gary Gensler is probably the most crypto-informed person to lead the SEC.
The US President-elect Joe Biden has today confirmed the appointment of Gary Gensler as the new SEC Chair. Gensler is replacing acting Chair Elad Roisman, after Jay Clayton—who led the SEC from May 2017—stepped down on December 23.
Gensler spent nearly 20 years at Goldman Sachs in the 1980s and 1990s before joining the Clinton administration as Assistant Secretary of the Treasury. He later served as a key financial regulator for former President Barack Obama.
🗞 Ethereum-based Options Platform Charm Goes Live on Mainnet
Ethereum-based decentralized options platform Charm has gone live.
The project uses an automatic market maker to create liquidity and lower users' expenses.
Since the platform is highly experimental, users should be prepared to lose all their assets, Charm's developers stressed.
Highly experimental, decentralized options platform Charm announced its mainnet launch today, promising users an innovative way to trade Ethereum (ETH) options contracts.
“Charm is a breakthrough Automatic Market Maker (AMM) that can create liquid options on the blockchain. By applying a prediction market scoring rule to the options world, we have invented a new model for options creation, pricing, trading, and settlement,” said the announcement.
“So ETH is split up into two payoffs (call and covered call) that sum up to 1 ETH and people can buy either one from a prediction market AMM (since the prices sum up to 1). if they buy a covered call payoff, that's equivalent to holding 1 ETH and writing an ETH call, so they can get short option exposure this way,” Charm developer Max told Decrypt.
🗞 Daily Crypto Calendar, January, 18th💰
Crypto.com Coin (CRO)
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